Social security of non-standard workers: a challenge at national and European level
Dr. Saskia Montebovi
Providing access to social protection is crucial for the economic and social security of the workforce and well-functioning labour markets that create jobs and sustainable growth. Nevertheless, there is a growing number of people who, due to their type of employment relationship or form of self-employment, do not have sufficient access to social protection.”[1]
As more and more workers, both in the Netherlands and in other member states, can no longer be considered standard employees, it is useful to examine the social security protection of this growing group of non-standard employees.[2] Who are they? What protection do they have, what protection do they lack, and what happens in a cross-border work situation?
We can no longer ignore the increase in new forms of work and contracts, including on-demand work, part-time work, intermittent work, voucher work, platform work and self-employment (including pseudo self-employment).[3] The evolution towards this type of employment relationship over the past 20 years will – in the long term – affect and threaten the social, economic and financial sustainability of our social security systems.[4] But even now, workers, their employers and governments are already running into the limits of current systems. Because defining the employment relationship can be so complex, the social security position of the non-standard worker is often already in question. Based on current legislation and the lack thereof, platform workers offering and performing their services through Uber, Deliveroo, Helpling, Werkspot, Foodora, etc. are generally classified as self-employed. This has a direct impact on their social protection, as it is much more limited for the self-employed compared to employees. It has also become clear that workers with a high degree of labour mobility often lack social security rights and entitlements precisely because of their changing work patterns, which are sometimes carried out in several countries.
In addition to freedom and economic gain , this lack of a comprehensive and transparent legal framework for platform workers and workers with a high degree of labour mobility leads to abusive, legal uncertainty, legal inequality, insufficient legal protection, etc.[5] In the Netherlands, Wouter Koolmees, the Minister of Social Affairs and Employment, has promised to propose a solution by 2020 . Furthermore, initiatives are being implemented at the European level, although they are not binding.[6]
In the absence of new legislation and sufficient case law, we will have to define and regulate the new labour relations with the existing rules. The main bottlenecks are: first, the limited hours or income from non-standard employment relationships and the related limited social contributions and accrual; second, the diffuse separation between employees and the self-employed, which also increases pseudo-self-employment; third, the digital revolution, which is drastically changing the nature of work and employment relationships; and fourth, the European rules in the Regulations on coordination of social security systems (EC Regulations 883/2004 and 987/2009). These European rules are still based on physical presence at a workplace. This is inflexible with regard to workers in new forms of employment such as teleworking and hybrid workers – those who sometimes function as employees, self-employed or civil servants and sometimes combine different statuses and jobs – and with regard to temporary contractors who, voluntarily or involuntarily, enter into varying short-term, temporary employment relationships and sometimes find themselves in a legal vacuum in the meantime. Moreover, those who work alternately in their country of residence and in the country of work are bound by the coordination rules laid down in European regulations drafted during the period when workers had one job with one employer for an extended period of time.
The Cross-Border Impact Assessment further analyses European integration, sustainable development and Euroregional cohesion with regard to non-standard workers such as teleworkers, homeworkers and workers who have multiple short-term employment relationships, whether they have consciously and voluntarily chosen to do so or not.[7] The themes of European integration and Euroregional cohesion refer to current complex or overly complex working and labour relations that cannot be addressed by the current coordination regulations. Since the current designation rules of the regulations still use the country of employment as the main rule and assume the physical presence of the worker, teleworking or a combination of different jobs in different countries is difficult to classify and leads to undesirable and impractical changes in the applicable legislation. Thus, a teleworker would be covered by social insurance in the Netherlands one week because he spends most of his working time there, while during another week German social insurance legislation should apply because the teleworker works more hours at home in Germany.[8] This is unattractive to both employees and employers. Thus, employers are not encouraged to take advantage of the free movement of people. Moreover, the issue of equal treatment also comes into play, as employers who want to treat all their employees equally and have them all covered by Dutch social security provisions and labour law rules must take into account the 25% rule of the regulation. As a result, employees who work from home one in three or two in five days will no longer be socially insured under the legislation of the ‘main workplace’ or the place where the employer is located, but will be insured under the social security legislation of their place of residence. This means that equal treatment in laws and regulations, as employers also often seek, is now practically impossible despite the fact that working conditions at home and at the employer’s premises via teleworking are almost identical.
In short, the proliferation of non-standard employment relationships and the gig economy certainly do not contribute to legal certainty or clarity for non-standard workers. Moreover, it often does not contribute to a decent legal status for non-standard workers, especially in cross-border employment relationships. Both current national legislation and European regulations should be tightened or adapted, which would be good for workers, employers and governments.
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[1] European Commission: Proposal for a Council recommendation on access to social protection for employed and self-employed persons, 13 March 2018, COM(2018) 132 final, p. 1.
[2] For the description and definition of both the non-standard employee and the standard employment relationship, please refer to the cross-border impact assessment on which this summary is based.
[3] European Commission, Proposal for a Council Recommendation on access to social protection for employed and self-employed persons, 13 March 2018, COM(2018) 132 final, p. 2.
[4] For more information , see the European Commission ‘ s proposal for a recommendation on access to social protection for employed and self-employed persons, 13 March 2018, COM(2018) 132 final, pp. 1 and 2. See also page 4 of the same document for percentages related to different types of employment relationships.
[5] Examples include the situation of workers at Deliveroo, Uber, Helpling, etc.
[6] For examples at the Dutch national level, see documents such as the coalition agreement of 10 October 2017, pages 22-26 ( available in Dutch only). For examples at EU level, we refer to documents such as the European Pillar of Social Rights, a European agenda for the collaborative economy, the Commission work programme for 2018, the White Paper on the future of Europe the proposal for a Council recommendation on access to social protection for employed and self-employed persons, and the proposal for a directive on transparent and predictable working conditions in the European Union.
[7] See the Social Security dossier from section 2.3.2 of the ITEM Cross-Border Impact Assessment 2018.
[8] This is a simplified picture because several factors come into play over a longer period. For more information , see EC regulations 883/2004 (articles 11 and 13) and 987/2009 (articles 6, 14 and 16).